The Bureau of Economic Analysis reported that U.S. gross domestic product grew at a 3.1% annualized rate in its advance estimate for Q3 2026. That exceeded economists’ consensus estimate of 2.7%. Resilient consumer spending and a slight increase in business investment drove the stronger growth.
The simultaneous release showed that core Personal Consumption Expenditures (PCE) prices rose 0.4% month over month, in line with expectations. The steady inflation reading, combined with strong growth, suggests inflation may not be cooling as quickly as policymakers hope.
The data could strengthen the case for further Federal Reserve interest rate hikes to combat inflation. After the releases, Treasury yields rose and equity futures remained negative as investors weighed the prospect of a more hawkish Fed.